mtm developing a indie practice

MEDICATION THERAPYMANAGEMENT SERVICES

Professional education monograph series for pharmacists from APhA

IndependentMTM Pharmacist

Module 11

Developing a Practice as an Independent MTM Pharmacist

Learning ObjectivesAfter reading this monograph, the pharmacistwill be able to:1. Describe the professional role and business

model of a pharmacist working as an inde-pendent medication therapy management(MTM) pharmacist practitioner.

2. Explain aspects of business planning strate-gies, including an analysis of a businessventures strengths, weaknesses, opportuni-ties, and threats.

3. Describe federal and state pharmacy lawsand regulations and state and local busi-ness laws and regulations that should bereviewed when starting a new venture asan independent MTM pharmacist practi-tioner.

4. Describe potential liability issues pertainingto pharmacists as MTM practitioners andlist safeguards to consider prior to businessinitiation.

5. Access tools and resources available forpharmacist practitioners to build and pro-vide MTM services in an independentpractice.

ACPE Activity Type: Application-Based

MTM Presents New OpportunitiesThe inclusion of medication therapy management (MTM) as a requirement

for prescription drug plans in the Medicare Modernization Act of 2003 helpedpromote the application of pharmacists clinical expertise to patient care byincluding payment provisions for pharmacists. Five years later, a growing num-ber of patients and third-party payers are recognizing the value of pharmacistsknowledge and the education they provide during MTM encounters.1 In addi-tion to Medicare prescription drug plans, several Medicaid programs, self-insured employers, and self-paying patients currently compensate pharmacistsproviding MTM services.

MTM services using a systematic and consistent core elements modelframework (medication therapy review, personal medication record, medica-tion-related action plan, intervention and/or referral, and documentation andfollow-up) have been successfully incorporated in a variety of settings by phar-macists.2 These settings include community pharmacies, ambulatory care clinics,long-term care settings, hospitals, and hospices.1

Pharmacists who have implemented services report many benefits, includ-ing increased patient satisfaction, improved patient care, and increasedprofessional satisfaction.1 However, a number of barriers have prevented morewidespread MTM implementation. In a recent survey, 186 pharmacists whowere not currently providing MTM services reported that the most importantreason for not implementing these services was lack of time.1

Pharmacists are using a variety of systems and models to implement MTMservices. As the practice of pharmacy continues to evolve, some pharmacists areexploring new professional opportunities by providing MTM services as a separate, independently owned practice. There are emerging opportunities forpharmacists with the desire to begin providing MTM services on their own orexpand the services that they already provide to other settings.

For those pharmacists interested in being an independent MTM pharmacistpractitioner, there may be some uncertainty of how to get services started orwhat steps they will need to take to support the development of a successful venture. Oftentimes, one of the biggest concerns when starting a new business isnot knowing what you dont know.

If you would like to explore opportunities to provide MTM services outsidethe structure of a traditional practice setting, this monograph will help you learnstrategies for starting your independent practice, identify laws and regulationsthat you must comply with as an MTM provider, and analyze potential chal-lenges so you can be prepared and develop a well thought out plan beforeproviding MTM services to patients.

This monograph addresses issues that are specific to providing MTM ser-vices in an independent practice. Additional training programs are availablefrom the American Pharmacists Association (APhA) that offer in-depth discus-sion of several other issues that pertain to developing and providing MTMservices. The APhA MTM Resource Center at www.pharmacist.com contains abroad range of materials that can assist you as you prepare to start your ownservice, including training in MTM service delivery, an MTM Self-AssessmentTool, and detailed guidance on writing business plans and documenting services.

Defining Your MTM PracticeOnce you have decided that you want to explore opportunities to develop

your own independent MTM practice, you will need to establish the parametersof the business. (The specific opportunities that you are able to pursue may belimited by your state practice act.) Some questions to reflect on when definingyour service include:

n What unmet MTM needs exist in your community?n How much time do you plan to commit to your MTM practice? n Will you choose to provide specialized services such as

ADVISORY BOARDLeAnn Causey Boyd, PharmD,BCPS, CDEDirector of Clinical ServicesCauseys Pharmacy dba Causeys Rx

SolutionsNatchitoches, Louisiana

Don Thibodeau, BS Pharm, RPhClinical Pharmacist and

Chief Executive OfficerThe PillHelp Co., LLCFort Myers, Florida

DISCLOSURESLeAnn Causey Boyd, PharmD, BCPS, CDE, isa consultant for Third Party Station where she isinvolved in the service described in this program.She declares no conflicts of interest or financialinterests in any other product or service men-tioned in this program, including grants, employ-ment, gifts, stock holdings, and honoraria.

Don Thibodeau, BS Pharm, RPh, is employedby Target Pharmacy and The PillHelp Co., LLC,where he is involved in the service described inthis program. He declares no conflicts of interestor financial interests in any other product or service mentioned in this program, includinggrants, employment, gifts, stock holdings, andhonoraria.

APhAs editorial staff declares no conflicts ofinterest or financial interests in any product orservice mentioned in this program, includinggrants, employment, gifts, stock holdings, andhonoraria.

This publication was prepared by Judy CrespiLofton, MS, of JCL Communications on behalfof the American Pharmacists Association.

2008 by the American PharmacistsAssociation. All rights reserved. Printed in U.S.A.

n disease state education in addition to generalMTM services?

n Where will you provide services?n What payment opportunities exist?n What fee structure and billing methods will you

employ?Writing a mission statement for your practice is a

useful strategy for helping you better define your visionand goals for the service. Your mission statement shouldbe two or three sentences that describe who you are, thenature of the services you will provide, and the intendedconsumers of your services. It may also mention yourcore values and your desired public image. Having amission statement can be useful in your marketing activi-ties, because it provides a succinct message about thepractice. Furthermore, a mission statement can serve as aguidepost as your business matures to help you assesswhether you are progressing toward your professionalgoals, or whether adjustments to either your business oryour goals are necessary.

A SWOT analysis should be performed as part ofthe process to define your MTM practice. A SWOTanalysis is a general tool that can be applied to diversesettings to analyze internal/personal Strengths andWeaknesses and place them in context of externalOpportunities and Threats. The SWOT analysis willhelp you define both your current skills and needs alongwith the external environment in which you plan to pro-vide the service. An example of a SWOT analysis for

starting an MTM practice is shown at www.pharmacist.com/mtm/swot.

Your Turn: Conduct a SWOT analysis of yourstrengths and weaknesses along with the opportunitiesand threats for starting your MTM service.

Carving Out TimeAs noted earlier, time constraints have been cited by

pharmacists as the most important barrier to MTM service delivery. As you begin thinking through thedevelopment of your independent MTM practice, it willbe essential to determine how much time you want todevote to providing services and identify areas of yourschedule you will cut back to allocate this time to yourindependent MTM practice.

Many pharmacists starting their own businesseschoose to provide MTM services part-time, either withor without reducing hours at their current employer.Developing an independent MTM practice as a supple-ment to other employment has several benefits, such asallowing you to maintain a source of steady income andbenefits (e.g., health insurance) and providing a financialcushion as you determine the long-term financial viabil-ity of your service. However, some pharmacists may optto begin their independent MTM practice as a full-timeventure. This model allows pharmacists to devote alltheir professional efforts to the development of theirpractice, but is generally advisable only for pharmacistswho feel comfortable that they will be able to generatesolid, consistent demand for their services, and have cashreserves to sustain themselves financially during slowperiods.

It may be difficult to predict the number of patientswho will utilize services provided by your practice, andmany current independent MTM providers report thatpatient case levels are inconsistent from month tomonth. Starting a part-time practice can help as yougrow your business and allows more flexibility to adjustto changing market conditions.

If you plan to provide MTM services part-time, youwill need to decide whether you will scale back on yourcurrent work hours. Consider whether you will provideyour services in the evening, on weekends, or during aselected day of the week, and the benefits and draw-backs of each approach. For example, if you provideyour services in the evenings, will it allow you to main-tain a reasonable balance between your professional lifeand your personal life? If you provide your services onlyone day a week, how will you manage issues that requirefollow-up? Also consider the potential scheduling needsof your patients. If you intend to target your marketingefforts toward patients who are retired, they may preferdaytime appointments, whereas patients who hold 9-to-5 jobs may prefer evening appointments. Finally, as youreview your scheduling options, remember that you will

Medication Therapy Management Services: Developing a Practice as an Independent MTM Pharmacist 1

Whats in a Job Title?

As you begin to develop and market your MTM practice, you willneed to select a job title to define yourself. Some MTM providerssimply refer to themselves as an MTM pharmacist or MTM providerand use this title to introduce themselves to patients, prescribers, andother involved parties. Others select a short phrase to describe them-selves, such as clinical pharmacist who performs MTM services. Youmight choose to use your name and credentials, followed by a tag linesuch as providing education to patients and their health care team tooptimize medication use, or providing medication information,assessments, and medication-related risk management.

Some pharmacists have considered calling themselves MTM consultants, because they are providing MTM in a consultant role.However, the term consultant should be used carefully, because ithas a specific meaning within pharmacy and is often used synony-mously with those practitioners who provide services such as medica-tion regimen reviews (MRRs) within a long-term care facility.

For example, many professional liability insurance policies have notspecifically distinguished between MTM services and consultant phar-macy, and may charge higher rates for pharmacists who describethemselves as consultant pharmacists. Furthermore, state pharmacypractice acts may specifically describe activities for consultant pharmacists. Consultant pharmacists are governed by specific lawsand regulations.

Other possibilities for a title would be independent MTM pharmacist,or independent pharmacist practitioner. However, be cautious whenusing the term independent, because many in the pharmacy commu-nity regard independent as indicative that the pharmacist is theowner of the pharmacy in which he or she operates. Finally, take careif you choose to use the words stand-alone service to describe yourbusiness. By definition, MTM services should stand alone from therequirements associated with dispensing services, and this terminologywill not allow you to differentiate yourself.

Your Turn: What job title will you give yourself?

need to allocate time to manage the paperwork andother administrative tasks associated with the business.

After you plan a schedule for providing services inyour practice, you may want to start allocating this timeto your business development and marketing efforts.This strategy will allow you to devote specific periods oftime to growing your business and to determine whetheryour planned time commitments will be feasible withyour other responsibilities.

If you plan to maintain full- or part-time employ-ment while starting your own part-time MTM business,carefully review your contract with your currentemployer to ensure that it does not prohibit you fromsuch ventures. If it does, it may be possible to renegotiateyour terms of employment to allow you to start yourown MTM practice without conflict.

Determining the Scope of Servicesto Provide

The nature of the services you choose to provide isan important factor. Will you solely offer general MTMservices following the core elements model described byAPhA and the National Association of Chain DrugStores Foundation, or will you offer additional special-ized services in specific disease state areas?2 Also,consider the needs of your community. For example, isthere a large population of patients with diabetes whomight benefit from a service that specializes in managingthe medication needs of such patients?

Are potential payers likely to be interested in specific activities or comprehensive services? As you con-sider this aspect of developing an independent MTMpractice, assess your current clinical strengths and weak-nesses as well as your career goals. Determine whetheryou will need additional training to prepare yourself forthe roles that you envision in your career goals.

Location, Location, LocationAnother critical consideration will be the location

for provision of services. Numerous possibilities for loca-tions exist, including setting up a home office, annexingspace in a pharmacy, renting space in a physiciansoffice, visiting senior centers, or providing services on-site at employers. Some MTM providers also makehouse calls. In fact, you can provide MTM just aboutanywhere that you can meet privately with a patient and bring the necessary equipment and paperwork.(Community centers or public libraries may have privaterooms that you can reserve for this purpose.)

You may even be able to provide services in otherpharmacies. For example, other pharmacies in yourregion might be willing to contract with you to provideMTM services on their premises for patients enrolled intheir Medicare Part D programs.

Finally, consider whether you will want your prac-tice to be based in one location or to be portable. If your

service is portable, it may increase access for morepatients, but may pose more logistical challenges.

Your Turn: Use WORKSHEETPART A to help map outyour vision of the service.

Developing a BusinessModel

Now that you have defined a vision for your inde-pendent MTM practice, you will need to begin filling inthe details of your plan to make your vision a reality.One of the most crucial steps to developing any profes-sional practice is to establish a financially viable businessplan. To do so, you will need to determine your costsand track projections for providing the service so youcan establish fees that will make your service sustainable.

Costs for Providing MTM ServicesA fundamental step in establishing a business model

is determining how much money you will need to bringin to cover your expenses and make a fair profit. Start byreviewing all the costs associated with initiating and pro-viding your services, including:

n Computer hardware and software, including adocumentation and billing system and informa-tion technology support

2 American Pharmacists Association

Distinguishing MTM ServicesFrom a Medication RegimenReview Performed by aConsultant Pharmacist

According to the American Society of Consultant Pharmacists, a consultant pharmacist is a pharmacist who is paid to provideexpert advice on the use of medications by individuals or within institutions, or on the provision of pharmacy services to institutions.3Although this definition is appropriately broad, the responsibilities andscope of practice of a consultant pharmacist are further defined bystate practice acts and federal regulations.

The traditional role of a consultant pharmacist is to provide a medica-tion regimen review (MRR) for long-term care facility residents, asrequired by the Centers for Medicare and Medicaid Services.4 Thisreview is distinct from one performed during MTM services in severalways. The MRR requires that the drug regimen of each nursing facilitypatient be reviewed at least monthly by a licensed pharmacist, whothen reports any irregularities, which must then be acted upon.5 Suchservices usually involve chart reviews and may not require direct con-sultations with patients. Today, the role of consultant pharmacists hasexpanded, and many provide MRRs in diverse practice settings.3

Patients in long-term care facilities may receive MTM services, andMTM services may be provided by consultant pharmacists. However,in this case, the consultant pharmacist activities must be separate anddistinct, and the two processes must be billed separately. (For exam-ple, a chart review cannot be billed as an MTM service; consultantpharmacists need to make available separate and distinct services ifthey want to provide both MRR and MTM.)

Although MTM is similar to MRR, patient education is an essentialfocus of MTM and the patient generally is more involved in implement-ing the action plan.

n Rent or mortgage for office space and storagen Utilities (phone, fax, Internet, electricity, water,

sewer, other)n Remodeling (e.g., for a home office)n Legal feesn Accountant feesn Office supplies and equipment, including a filing

system for patient recordsn Postagen Patient supplies (i.e., testing equipment)n Marketing costsn Additional liability insurancen Mileage (where applicable)n Support staff (e.g., billing assistant)See TOOLS AND RESOURCES for links to worksheets to

help you assess the costs of starting and running your ser-vice and additional guidance on business planning andrelated issues.

Finances for Starting Your BusinessEven if you intend to maintain regular employment

as a source of income while beginning your independentMTM practice, you may require a loan to manage start-up costs. These costs include lawyer fees, setting up ahome office, documentation and billing systems, market-ing, and the mileage for driving to potential clients.

Estimate the costs associated with starting yourpractice, and determine whether you will need a loan tocover these costs. If you plan to take a loan, you willlikely need to write a business plan, which will detail theexpected costs of service and revenue projections. Severalresources are available to assist you with this process,including those made available through APhA and theU.S. Small Business Administration (see TOOLS ANDRESOURCES).

Many business owners recommend the developmentof an informal business plan even if it is not required tosecure a loan. Reviewing business model worksheets thatare available in a range of resources, including those inthe TOOLS AND RESOURCES section, can help you thinkthrough and plan for the various factors that will affectthe financial success of your independent MTM practice.

Establishing FeesAn important part of planning for your business will

be estimating the amount of compensation you willreceive for your services. Compensation may comethrough contracts with third-party payers (e.g., MedicarePart D plans, self-insured employers, other commercialinsurance, Medicaid [in select sates]) and from out-of-pocket payments from patients. It is essential todetermine the level of compensation necessary for yourservices to generate a fair profit before you begin con-tracting with payers.

Consider the number of patients you would need totreat to break even (i.e., cover your start-up and over-

head costs before producing any net income). For exam-ple, if your overhead costs were $500 per month, youwould need to see five patients per month at $100 eachto cover those costs (not accounting for the taxes youwould pay on the income). And, if you take out a$10,000 loan to start your business, you would have tomake payments of roughly $200 for 5 years to pay offthat loan (loan rates and terms may vary), requiringanother two patients per month to cover costs.

Treating more patients will help you amortize (i.e.,spread out) your start-up and overhead costs. Therefore,if you provide services to only a few patients each month,it may be difficult to be profitable.

After estimating the overhead expenses to provideyour service, and adding this to an hourly rate for yourincome, you will be better able to determine a fair hourlyrate for your services. Be sure to account for the taxesyou must pay on your income and the administrativetime spent on the provision of services outside the actualencounter when determining a profitable fee.

Have this rate in mind when you enter into contractnegotiations with third-party payers. (It will be helpful ifyou have data showing that the payers expected cost sav-ings will exceed the amount of money you ask them toinvest in your services.) Also consider that you will onlybe able to charge fees that the market will bear. If yourcosts are too high, you may need to investigate more effi-cient means for delivering services. On the other hand, ifyou contract with Medicare and/or Medicaid, you areprohibited from charging others a lower rate. The LewinGroup report, commissioned by APhA, provides addi-tional guidance for establishing pharmacists fees forMTM services.6

Finally, many pharmacists want to expand theirpatient care services to reap intangible benefits, such asincreased professional satisfaction derived from address-ing patient needs and the ability to develop moremeaningful relationships with patients. In fact, in a recentnational survey of pharmacists providing MTM services,patient needs were listed as the most important reason forimplementing services.1 These are real benefits associatedwith MTM, and pharmacists should be commended forseeking them. Nevertheless, it is essential to ensure thatyour revenues will exceed your expenses and provide aviable income, or you will not be able to attain these ben-efits for long.

Contracting to Provide ServicesOnce you have determined a rate for your services

that will allow your practice to be financially viable, youwill need to identify payers and establish contracts.Consider all potential opportunities to be compensatedfor providing services in your community. Are many indi-viduals in your community covered through MedicarePart D or a state Medicaid program that provides MTMservices? Are there employers open to exploring the bene-fits MTM provides? Do the residents of your community


have the resources to pay out of pocket for services?(Keep in mind that potential patients and others are likelyto need education about the benefits of MTM before theyare willing to pay for services.)

Some payers, such as Medicare Part D plans andMedicaid, offer a standard contract. Payment ratesoffered through such programs vary widely and are gen-erally not negotiable. Some are based on the amount oftime spent with the patient, while others offer a flat feeper encounter. You may need to start providing MTMservices to get a good sense of the amount of timerequired to assess the profitability of a fee-per-encounterpayment system. Keep in mind that service delivery islikely to become more efficient as you gain experience.However, do not be afraid to turn down contracts thatwill not allow you to generate a fair profit.

Contracting with small to midsized employers gener-ally allows more room for negotiation. Be prepared tooffer your own draft contract for services that can beadapted to meet company needs. Know beforehandwhich aspects of your contract you are willing to negoti-ate. For example, will you charge based on the amount oftime spent with patients, by the visit, or by the number ofpatients with a certain disease state who enroll in the pro-gram? When will payment for services be received? Whattypes of documentation must accompany the invoice?The contract should also specify how patients will beidentified for the program. It may also be wise to ask thecompany to provide credit references and call those refer-ences to assess the companys payment history.

Carefully review all contracts to familiarize yourselfwith the terms of the agreement. For example, some con-tracts include language describing the types of insurancecoverage you must carry. Clauses about indemnification,which specify legal responsibilities, are common and shouldbe fully understood, or clarified as needed. Ensure you knowboth your rights and responsibilities under any contract, andhave it reviewed by a lawyer, before signing anything.

Financial arrangements are generally more straight-forward for patients who pay out of pocket for services.However, determine ahead of time whether you are will-ing to allow patients to pay for services in installments,and if so, how you will manage accounts that becomepast due. You may choose to accept credit cards, whichcan help reduce the need to establish payment plans andlower the risk of incurring bad debt. If you choose thisoption, be sure to include credit card fees when calculat-ing your overhead.

ImplementationStrategies

After defining the vision for your independent MTMpractice and figuring out the financial aspects, it will betime to develop the infrastructure for providing your ser-vices. This will include procuring and/or developing a

documentation system to manage the service, and gener-ating sources of patient referrals. A number of materialsavailable from APhA at www.pharmacist.com givedetailed guidance on the elements of establishing such aninfrastructure. Here, we will focus on some of the specificissues facing the development of an independently runMTM practice.

Documentation and MaterialsRegardless of the size and nature of your practice,

you will need a comprehensive documentation system.Documentation is essential for developing a record of ser-vices provided, tracking outcomes, and performing qualityassurance activities. (For a review of documentation forMTM, see APhAs continuing education programDocumenting Pharmacy-Based Patient Care Services.)

Options are available for using either a paper-basedor electronic documentation system. Paper-based systemshave the advantage of requiring less up-front expendi-tures, but tend to be less efficient in the long run.Electronic systems tend to have greater up-front costs butmay be more cost effective over time. They may allow formore efficient management of patient records and manyfurnish additional functions such as outcomes tracking,features for communicating with other health careproviders, integration with billing and other accountingfunctions, and Health Insurance Portability andAccountability Act (HIPAA) compliance support, therebyreducing the amount of administrative time necessary.

If you plan to provide services in multiple locations,you need to determine which materials will be availablein each location and those that must be transported.Web-based documentation systems may be of particularbenefit for pharmacists caring for patients at multiplelocations.

Collecting clinical and economic outcome data aspart of your documentation process can help you marketyour services to current and potential patients as well aspayers. (Some payers may request that you track specificoutcomes.) Regardless of the outcomes tracked, it isessential to identify them early in the process so all neces-sary data are collected during service delivery.

You must ensure that your entire system is HIPAAcompliant, and may want to seek legal counsel to guidethe development of HIPAA policies and procedures andsupporting paperwork, such as consent forms for patientsto sign and business associate agreements that will governyour relationships with other entities. Furthermore, if youplan to work out of your home, your record-keeping system and backup storage also need to comply withHIPAA, including its security requirements.

In the event that you decide to discontinue the service or close your business, you still must maintainrecords for several years in case you are ever audited. Forexample, federal law requires that records be maintainedfor 10 years after a claim is submitted to Medicare Part Dplans. Check with your state board of pharmacy and/or



lawyer to determine if your state has more stringentrequirements.

You will need to maintain your own accounting sys-tem that will, among other things, manage billing andmaintain records for taxes and potential future audits. Ifyour pharmacy documentation software does not supportthese features, off-the-shelf software programs designedfor self-employed individuals are available to managemany aspects of the financial records of your service (e.g., Quicken, Quickbooks) and associated taxes (e.g., TurboTax, TaxCut). Keep in mind that as an independent contractor your income is not subject towithholding. You will need to make quarterly estimatedtax payments on income from your MTM practiceandmake sure that you set aside an appropriate amount eachmonth for taxes. (There may be a few exceptions in indi-vidual circumstances.)

Marketing Your MTM PracticeA targeted survey of third-party MTM payers

reported that lack of patient awareness of the benefits ofMTM services is the single most important barrier toexpansion of MTM service provision.1 Additionalresearch shows that as patients gain exposure to MTMservices, they are more likely to recognize the value ofMTM, have a favorable opinion of the services, anddesire the services for themselves.1,7,8 Therefore, market-ing efforts to support your MTM practice should addresspatients as well as employer groups, health care providers,and payers.

If you maintain other employment while developingand running your MTM practice, determine which, ifany, marketing activities are permissible while performingyour job functions. Check with your supervisor inadvance to clarify the pharmacys policy and ensure thatyou obtain a written confirmation of any allowed men-tion of your MTM practice. It may also be prudent tohave your lawyer review any information you plan toprovide while at another employer to ensure that you donot run afoul of antitrust and anti-kickback laws.

As you develop your marketing materials, keep inmind that an essential aspect of a strong marketing cam-paign is disseminating a clear message. Identify andemphasize the key features of your MTM practice thatare most likely to appeal to your market (e.g., reduceemergency room visits, reduce medication costs, improvepatient care, bolster patient empowerment) and ensurethat the message is clear and consistent throughout yourmarketing materials. Finally, be persistentMTM ser-vices remain a new concept for many, and you may needto continually reinforce your message to garner supportand referrals.

MARKETING TO PATIENTS AND PHYSICIANSMany different strategies can be used for marketing

MTM services to patients and physicians. For example,

are there physicians in your community who will likelyrefer patients to your service? Will you promote yourselfat health fairs or local community meetings? Such strate-gies may help you identify patients who will pay out ofpocket for MTM services, or might have third-party coverage.

As you strive to grow a referral base, think aboutoffering meet the pharmacist nights at local senior cen-ters and other community groups or other free publicrelations activities that may help increase awareness ofthe value of MTM and provide a source of referrals.Setting up an informational booth at shopping malls,community fairs, and other areas with heavy foot trafficalso may be beneficial.

Word-of-mouth communication can be an impor-tant source of patient referrals. However, make sure thatany activities you use to encourage referrals do not vio-late the antikickback statute, which makes it illegal tosolicit or receive remuneration for the referral of a patientwho receives benefits through a government health careprogram, such as Medicare or Medicaid. (For example,you cannot have a referral contest in which you give aprize to the person who generates the most referrals.)You will need to be particularly sensitive to this risk ifyou sometimes practice within a physicians office.

Another option is to identify patients throughMedicare Part D and Medicaid programs. Some nationalplans help to identify Medicare Part D patients for MTMservices, however many have specific requirements thatmay be difficult for individual MTM service providers tomeet. State programs that identify patients who are eligi-ble through Medicaid vary. One option for providingservices to patients eligible for MTM through Medicare isto contract with other pharmacies in your area that arenot yet providing these services. Such pharmacies maynot have the human resources available to meet all oftheir MTM needs but may be willing to contract withoutside pharmacists to handle their MTM cases.

SMALL TO MIDSIZED EMPLOYERSMarketing to local employers has been used as a

successful business strategy by many pharmacists whoprovide MTM services. Consider the small to midsizedemployers in your community, and seek out those whomake a commitment to health and wellness. Identify thekey decision makers at the company (e.g., humanresource manager, health plan coordinator). Go toregional meetings of small businesses and use the forumas an opportunity to network. Attend meetings of groupsof business leaders, such as Rotary clubs, and the localchamber of commerce. Such networks may contributecontacts with small business owners who might be inter-ested in contracting with you to provide your services totheir employees.

When you market to employers, emphasize thatMTM services not only improve clinical outcomes, butcan also reduce absenteeism and lead to a more produc-

tive workforce with improved morale. (MTM serviceshave been shown to reduce both direct health care costsand the number of sick days per year for employeesenrolled in the programs.911

Your Turn: Use WORKSHEETPART B to help guide yourmarketing plan.

Laws and RegulationsAs a practicing pharmacist, you are already familiar

with many of the laws and regulations that affect thepractice of pharmacy. However, before beginning anMTM business venture you need to make certain that allaspects of your MTM practice and business comply withfederal, state, and local laws and regulations. It is gener-ally wise to have a lawyer review your business to ensurethat you are complying with such laws and regulations.

You should also review your state practice act to besure that all aspects of the service you plan to provide arepermissible. It may be most practical to first consult withyour state pharmacy associations government affairsgroup to gain insight on the boards current interpreta-tion of various aspects of the act. (Some state pharmacyboards have chosen to remain silent on this issue.)Consider contacting your board of pharmacy to inquirewhether your planned MTM activities are within thepractice act and requesting a response in writing.

The legal status of your practice is another importantfactor to consider. You may want to incorporate your ser-vice, establish a limited liability company, or act as a soleproprietor. Some of these options allow you to separateyour personal assets from your business assets in theevent that your business is ever sued or declares bank-ruptcy. Many online resources provide guidance regardingthe pros and cons of each of these options; you may alsochoose to ask a lawyer and/or certified public accountantfor guidance. Most likely, you will need to apply for a fed-eral Employer Identification Number for tax purposes.

You will need to comply with the relevant laws andregulations associated with being an employer if youdecide to have any employees, such as an office assistantto help manage paperwork and billing. (Many Internetresources offer guidance in this area.) Again, it may bejudicious to have a lawyer oversee any employmentopportunities that you offer.

Pharmacists who plan to perform point-of-care testing must comply with standards established by theOccupational Safety and Health Administration, andmust register if planning to perform Clinical LaboratoryImprovement Amendments (CLIA)-waived tests.9

Finally, some third-party payers, particularly thosefunded through government health programs, mayrequire you to participate in training to address variousissues, such as HIPAA, waste, fraud, abuse preventionefforts, and/or their billing and documentation require-ments, as a condition of their contract. You should

familiarize yourself with these laws and regulations aswell as federal antitrust and anti-kickback statutes.

Managing LiabilityIt is essential that pharmacists consult with a phar-

macy liability insurance company before starting a newpractice, and purchase additional coverage as necessary.General professional liability insurance may not coverMTM services, and insurance companies may not cur-rently have a standard policy designed to cover thespecific services that you intend to provide.

As MTM service provision becomes more recog-nized and established, insurance companies may developstandard MTM policies to offer to pharmacists. Untilpolicies become more standardized, it may be wise tohave a lawyer review your liability coverage to ensurethat all the activities you plan to perform are covered. Ifnecessary, you can also work with a lawyer to assist youin drafting language for a new policy to propose to aninsurance liability company. (Colleagues or your statepharmacy association may be able to provide suggestionsor recommendations for identifying a lawyer with exper-tise in this area.) Although this requires an added step, itwill protect you against learning that you are not insuredfor the activities you are performing after a claim hasalready been filed.

If you have liability coverage through an employerand plan to provide outside services, you will require sep-arate liability coverage for providing those services. Inaddition, if you plan to provide services in an office spaceyou rent or own, you may want to have general liabilityinsurance to cover claims relating to the property, such asslip and fall claims.

Your Turn: Does your current professional liability insur-ance cover the provision of MTM services? If youre notcertain, be sure to contact your insurance company, andhave a lawyer review your policy independently.

In addition to ensuring that you are practicing withinyour capabilities and state practice act, attention to com-munication skills may reduce liability risk. Claims datashow that health care providers with good patient assess-ment and communication skills are less likely to be sued.10

Good communication skills help prevent misunder-standings and can foster better relationships withpatients, making them less likely to sue in the event of anadverse outcome. Warmly greeting the patient, askingopen-ended questions, listening attentively to the patient,and treating the patient the same way you would wantyour parents to be treated by their health care team aregeneral guidelines that can help.10 Effective communica-tion and collaboration with prescribers is not onlybeneficial for patient care, but may be mutually protec-tive in liability management.

Other liability pitfalls may surround patient assessment. Although the pharmacists role in patient



Part A: Defining the Practice1. How much time do you plan to dedicate to developing your MTM practice and providing MTM services?

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

2. How will you make room in your current schedule for this time commitment?

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

3. What services do you plan to provide? Do you intend to start with some of these services and then expand?

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

4. Where do you plan to provide services?

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

5. Which groups or entities do you anticipate will be the payers for your MTM service?

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

6. What are your plans for developing a documentation system?

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

Part B: Developing Your Marketing Plan1. List three prescribers in your community who are prospective sources of patient referrals, and describe a plan to market your

MTM service to them.

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

2. List three small businesses or business leader organizations in your region that might be interested in MTM services for theiremployees, and describe a plan to contact them.

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

3. List three community groups or locations (e.g., senior center, health fairs) where you could market your services, and describe aplan to provide a presentation to the group.

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

Worksheet 1. Developing a Plan for an MTM Practice

assessment is more limited than that of health care pro-fessionals who diagnose patients, it is important toensure that your patient assessment skills are appropriatefor the patient population(s) you will be treating and theservices you provide.

Finally, maintaining thorough professional docu-mentation will be essential should you ever face alawsuit, audit, or similar investigation.

Your Turn: How would you rate your communicationskills? If you think they may be a bit rusty, it might be agood time to participate in some training courses. Goodcommunication skills are useful when working withpatients and can help you foster business and profes-sional relationships.

SummaryThere are many opportunities for pharmacists who

want to provide MTM services, and these opportunitiescontinue to expand. Pharmacists should carefully assesstheir options for providing MTM services as an indepen-dent venture and research the many aspects of develop-ing their business with a solid plan for professional success.

References1. American Pharmacists Association. Medication Therapy Management Digest. Perspectives on

MTM Service Implementation. March 2008. Available at: http://www.pharmacist.com/AM/Template.cfm?Section=Pharmacist_Practitioners&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=15640. Accessed September 2, 2008.

2. American Pharmacists Association, National Association of Chain Drug Stores Foundation.Medication Therapy Management in Pharmacy Practice: Core Elements of an MTM ServiceModel. Version 2.0. March 2008. Available at: http://www.pharmacist.com/MTM.Accessed October 7, 2008.

3. American Society of Consultant Pharmacists. Get started in consultant pharmacy. Available at:http://www.ascp.com/start/index.cfm. Accessed September 3, 2008.

4. American Society of Consultant Pharmacists. Guidelines for medication therapy managementservices in long-term care facilities. March 2007. Available at: http://www.ascp.com/resources/policy/upload/ASCP-MTMGuidelines-3-3-07.pdf. Accessed September 3, 2008.

5. Centers for Medicare and Medicaid Services. State Operations Manual. Appendix PP Guidance to Surveyors for Long Term Care Facilities. Revised August 1, 2008. Available at:http://cms.hhs.gov/manuals/Downloads/som107ap_pp_guidelines_ltcf.pdf. AccessedSeptember 3, 2008.

6. DaVanzo J, Dobson A, Koenig L, Book R; for Lewin Group. Medication Therapy ManagementServices: A Critical Review. Final report. Prepared for American Pharmacists Association. May17, 2005. Available at: http://www.pharmacist.com/AM/Template.cfm?Section=MTM_New_to_You_&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=13633. AccessedSeptember 22, 2008.

7. Truong HA, Layson-Wolf C, Rodriguez de Bittner M, et al. Perceptions of patients on medica-tion therapy management (MTM) services pertaining to Medicare Part D. Presented at:American Pharmacists Association Annual Meeting; March 19, 2006; San Francisco, CA.

8. Brooks J, Unni EJ, Klepser DG, et al. Factors affecting demand among older adults for medica-tion therapy management services. Res Soc Adm Pharm. 2008. In press.

9. American College of Clinical Pharmacy; Harris IM, Baker E, Berry TM, et al. Developing abusiness-practice model for pharmacy services in ambulatory settings. Pharmacotherapy.2008;28:285.

10. Healthcare Providers Service Organization. HPSO Risk Advisor. Pharmacist edition. 2007.Available at: http://www.hpso.com/pdfs/newsletters/2007/ HPSO07_Pharm.pdf.Accessed September 3, 2008.


MTM and Pharmacy ResourcesInternet ResourcesAmerican Pharmacists Association

MTM Resource Centerhttp://www.pharmacist.com/mtm

State Association and Pharmacy Board Linkshttp://www.pharmacist.com; select Government Affairs, thenState Resources

Department of Health and Human Services HIPAA Web site http://www.hhs.gov/ocr/hipaa/

Healthcare Providers Service Organization Risk Management Articleshttp://www.hpso.com/resources/articles-index.jsf

National Association of Boards of Pharmacyhttp://www.nabp.net

MTM Business Planning SpreadsheetsThe following links allow you to download functional MSExcel worksheetsto assess various business scenarios. These worksheets may be modifiedand incorporated into business plans as needed.

Start-Up Costshttps://www.pillhelpworks.com/share/MTMStartCosts.xls

MTM Case Load Projectionshttps://www.pillhelpworks.com/share/MTMCaseProj.xls

Revenue Projectionshttps://www.pillhelpworks.com/share/MTMProjShort.xls

Recommended ReadingAmerican College of Clinical Pharmacy; Harris IM, Baker E, Berry TM, et al. Developing a business-practice model for pharmacy services inambulatory settings. Pharmacotherapy. 2008;28:285.

Berger BA. Communication Skills for Pharmacists. 3rd ed. Washington,DC: American Pharmacists Association; 2009.

Hagel HP, Rovers JP, eds. Managing the Patient-Centered Pharmacy.Washington, DC: American Pharmacists Association; 2002.Includes guidance for performing a SWOT analysis.

Hogue MD, Bluml B, eds. The Pharmacists Guide to Compensation forMTM Services. Washington, DC: American Pharmacists Association;2008.

Holdford DA. Marketing for Pharmacists. 2nd ed. Washington, DC:American Pharmacists Association; 2007.

Millonig M. 101 MTM Tips for the Pharmacist. Washington, DC:American Pharmacists Association; 2008.

Schumock GT, Stubbings J. How to Develop a Business Plan for PharmacyServices. Lenexa, KS: American College of Clinical Pharmacy; 2007.

Small Business ResourcesInternal Revenue ServiceLimited Liability Company Web pagehttp://www.irs.gov/businesses/small/article/0,,id=98277,00.html

SCORECounselors to Americas Small BusinessProvides educational resources on developing small businesses and a net-work of entrepreneurs who offer free mentoring.http://www.score.org/index.html

U.S. Small Business Administrationhttp://www.sba.govIncludes How to Write a Business Plan.http://www.sba.gov/idc/groups/public/documents/sba_home-page/pub_mp32.pdf

Tools and ResourcesMTM business development is an emerging field with new resources steadily being made available. The following is a sampling of publicly availablematerials that you may find useful.

mtm developing a indie practice

Documents